FOMC Minutes and Human Error
FOMC Minutes were released at 9am on Wednesday instead of the regular schedule
of 2pm release because the Fed confessed to sending them out to White House
staffers and trade groups including Barclays, BNP Paribas, Carlyle, Citi,
Goldman Sachs, JP Morgan Chase, Nomura, U.S. Bancorp and Wells Fargo, a day
early. “The reason is they were inadvertently sent early to a list of
individuals who normally receive the minutes by email shortly after their usual
release time,” a Fed spokesman said in a statement. “The individuals on the
distribution list -- primarily congressional employees and employees of trade
organizations received the minutes shortly after 2 p.m. Tuesday due to 'human
error'.” A Fed spokesman said they discovered the mistake Wednesday morning,
prompting the early release and the inspector-general has been asked to review
its communications procedures. Of course the early release raises question of
insider trader although no evidence was found.
In the FOMC Minutes, Federal Reserve officials remained divided over how long
they should keep buying bonds. While one Fed member wanted to slow the bond
purchases immediately, others favored slowing the purchases at midyear, with the
program ending later in 2013, some thought that if labor conditions improved as
expected, the Fed could slow purchases "later in the year and stop them by
year-end" and two members indicated that the purchases might well continue at
the current pace at least through the end of the year.
The U.S. Postal Service said Wednesday it has given up on its plan to end
Saturday service, saving nearly $2 billion a year, after encountering resistance
from Congress. In a statement, the USPS said, "Although disappointed with this
Congressional action, the board will follow the law and has directed the Postal
Service to delay implementation of its new delivery schedule until legislation
is passed that provides the Postal Service with the authority to implement a
financially appropriate and responsible delivery schedule." "The board believes
that Congress has left it with no choice but to delay this implementation at
this time. The board also wants to ensure that customers of the Postal Service
are not unduly burdened by ongoing uncertainties and are able to adjust their
business plans accordingly." "It is not possible for the Postal Service to meet
significant cost reduction goals without changing its delivery schedule - any
rational analysis of our current financial condition and business options leads
to this conclusion."
On Wednesday, President Barack Obama unveiled a budget that would cut
entitlement programs, tax the wealthy and reduce the U.S. budget deficit by
nearly $2 trillion while funneling new money to education and infrastructure in
an effort to bolster the middle class. Obama warned, “I will not agree to any
deal that seeks to cut the deficit on the backs of middle class families.”
Wednesday’s budget reduces the deficit by $1.8 trillion over 10 years which is
more than enough to replace the $1.2 trillion in cuts under the sequester.
Obama's plan brings in $3.03 trillion in revenue during 2014, leaving a
fiscal-year deficit of $744 billion or 4.4% of the economy while Ryan’s budget
would reap nearly $3 trillion. Other revenue-raisers in the budget consist of
increasing taxes on carried-interest income and repealing more than $4 billion a
year of subsidies enjoyed by the oil and gas industry. The President said, “The
package I am offering includes some difficult cuts that I do not particularly
like.” The budget would cut $400 billion from Medicare, reduce farm subsidies
and cut other programs by $200 billion. The offer from Obama to House Speaker
John Boehner demonstrates his goal of a tax and spending deal with Republicans.
Obama has included proposals aimed at raising $580 billion through the “Buffett
Rule” - which requires households earning over $1 million pay at least 30% of
their income in taxes - as well as limiting deductions that top earners enjoy.
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April 10, 2013